Egypt's El-Sisi raises sales tax on cigarettes and alcohol

Ahram Online, Sunday 6 Jul 2014

Cigarettes will now cost around LE2 more per pack, while taxes on beer and wine are set to go up by 200 and 150 percent, respectively

(Photo: Ahram Online)

Local and imported cigarettes and alcohol will cost more as of Monday, after Egypt's president Abdel-Fattah El-Sisi decided to raise sales taxes on both, according to the state's official gazette.

Under the new taxes, a pack of local cigarettes priced at LE9 will go up by LE1.75, those selling between LE9 and LE15 will increase by LE2.25, while those costing more than LE15 will be levied by LE2.75.

Accordingly, a pack of Cleopatras, the cheapest and best-selling Egyptian cigarette, will cost between LE8.00 and LE8.75, compared to LE6.25 and LE7.00.

Medium-priced brands like L&M will be offered by retailers at LE14.25, up from LE12 per pack.

High-price brands like Marlboro will be sold at LE19.75 per pack, compared to LE17.

Imported brands will see the same increases as well as a rise of 50 percent of its retail price. For example, a pack of Dunhills will be sold at LE28.25 instead of LE17.

It's not the first time cigarette prices have been raised this year. The finance ministry upped the cost in February by LE0.5 to LE0.75 for local brands and LE1 to LE1.5 for imports.

As for alcohol, taxes on local and imported beer will see a 200 percent increase, with a minimum of LE400 per 100 litres – or LE1.2 per 330ml bottle of Stella beer.

Taxes imposed on wine and spirits will register a 150 percent increase (minimum of LE15 per litre).

El-Sisi's decision has not clarified the projected revenues from both commodities.

Revenues from sales taxes are expected to reach LE118.4 billion in fiscal year 2014/15, up from the proposed amount of LE92 billion in the past fiscal year 2013/14, according to government figures.

In December 2012, president Mohamed Morsi issued similar price increases on cigarettes and alcohol but retracted them following a public backlash and ordered the government to carry out "social dialogue" on the measures before their implementation.


Correction: The 330ml stella bottle will see LE1.2 increase in sales tax not LE0.82.

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